Financial Services Ireland

Thought Leadership

European Banking Barometer 2015

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European Banking Barometer 2015 – Reflecting a challenged industry

Our sixth European Banking Barometer shows that the broad-based optimism about the economic recovery that we saw in our 2014 study has evaporated, giving way to a more grounded outlook.

Despite this, more than half of the respondents believe that their banks’ financial performance will improve this year – but only slightly, as financial institutions continue to grapple with a complex and evolving regulatory agenda.

Cost reduction and the regulatory agenda are still dominating with the top three areas of focus being risk management, capital and liquidity along with reputational risk management. It is clear that to achieve a return on equity which investors’ will find attractive, European banks need still to significantly increase revenue and simultaneously reduce costs.

Recent results from the major Irish banks show an encouraging trajectory in our own market and while economic activity within London’s M25 is impressive, continental Europe is still very much struggling.

The survey explores the following key findings in greater detail:

  • Weak economic recovery expected, but gradual improvement in banks’ financial performance to continue
  • Banks retain over-ambitious ROE expectations
  • Banks show signs of growth and improving profitability by focusing on core activities
  • Risk and regulation remains at top of bankers’ agendas
  • Investment in technology is critical, especially to address cybersecurity and financial crime
  • Further job losses expected as post AQR industry restructuring gathers pace and banks cut costs to drive growth
  • Bankers have more modest pay expectations that doesn’t align with the priority placed on investing in new remuneration systems.

Please do not hesitate to contact myself or your local EY contact for further information on these issues.


Cormac Murphy

International Banking & Capital Markets, Sector Leader
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